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Source : Cour de cassation – Base Open Data « Judilibre » & « Légifrance ».

Barreau de Paris Immobilier, sociétés, affaires Fiche CNB avocat.fr
Maître Reda KOHEN, avocat au Barreau de Paris
Maître Reda KOHEN
Avocat au Barreau de Paris

UK Government Pension in France After Brexit: Which Country Taxes Each Pension and How to Challenge a Wrong Bill

UK search interest has surged this week around one striking comparison: the rising new UK State Pension against the frozen UK Personal Allowance. For a British pensioner living in Torquay, that crossover means more of the pension falls into UK tax. For a British pensioner living in the Dordogne, the question is different and more treacherous: which of your pensions does France tax, which does the United Kingdom still tax, and what happens when each country sends you a bill for the same income? This article answers those three questions for British residents of France who receive a UK government-service pension — a civil service, NHS, teachers’, local authority, police or armed forces pension — alongside a UK State Pension or a private pension. French tax vocabulary is explained at first use: the foyer fiscal is your tax household, the avis d’imposition is your tax bill, and a réclamation is the formal claim you file to challenge that bill. The core distinction is simple to state and easy to get wrong in practice. Pensions for past private employment, including the UK State Pension, paid to a person who lives in France are taxable only in France. Government-service pensions are, as a rule, taxable only in the United Kingdom. Each rule has its paperwork, its credit mechanism and its traps, and the second half of this article shows how to declare correctly, compute the French tax credit, and challenge a wrong assessment before the French courts.

I. Which country taxes which British pension when you live in France

A. Your UK State Pension and private pensions are taxable only in France

Everything starts with French tax residence, because residence decides whether France taxes your worldwide income or only your French-source income. Article 4 A of the French General Tax Code (Code général des impôts) provides that: “Les personnes qui ont en France leur domicile fiscal sont passibles de l’impôt sur le revenu en raison de l’ensemble de leurs revenus. Celles dont le domicile fiscal est situé hors de France sont passibles de cet impôt en raison de leurs seuls revenus de source française.” In plain terms, once France is your tax home, France taxes all of your income, wherever it is paid from. The tests for that tax home are set by Article 4 B of the same code, and the first two are the ones that matter to most retired British residents: having your foyer, your permanent home, in France, or having your main place of stay (lieu de votre séjour principal) in France (Article 4 B). If you live year-round in your French house, you meet one of these tests, and France regards you as a French tax resident even though your pensions are paid from Newcastle or Darlington.

Once you are a French tax resident, your British pensions enter your French taxable income. Article 79 of the General Tax Code states that: “Les traitements, indemnités, émoluments, salaires, pensions et rentes viagères concourent à la formation du revenu global servant de base à l’impôt sur le revenu. Il en est de même des prestations de retraite servies sous forme de capital.” Pensions therefore form part of your overall worldwide income (revenu net global) taxed in France. A valuable relief softens the bill: Article 158, 5, a of the same code provides that: “Les pensions et retraites font l’objet d’un abattement de 10 % qui ne peut excéder 4 439 €. Ce plafond s’applique au montant total des pensions et retraites perçues par l’ensemble des membres du foyer fiscal.” That 10 per cent allowance, with its floor of 454 euros per pensioner, applies to British pensions exactly as it applies to French pensions, because the treaty examined below gives France the exclusive right to tax them.

The treaty is the convention signed in London on 19 June 2008 between France and the United Kingdom for the avoidance of double taxation, published in France by the consolidated treaty text published by the French tax administration. Its Article 18 deals with pensions for past employment: pensions and similar payments made to a resident of one contracting state for past employment are taxable only in that state of residence. For a British national who is a French tax resident, that means the UK State Pension and any private or occupational pension for private-sector work are taxable only in France, not in the United Kingdom. The British side of the arrangement is administrative: because the pension is treaty-exempt in the UK, HM Revenue and Customs should not withhold UK tax from it. The British government’s own guidance confirms that most pensions can be relieved where a double-taxation agreement allocates the taxing right to the country of residence, while warning that most UK government pensions are different because they remain taxable only in the UK (GOV.UK, tax if you are taxed twice). In practice, a French-resident Briton asks HMRC for relief at source or a refund through the double-taxation claim procedure, commonly using form DT-Individual, so that the State Pension and private pensions arrive free of UK withholding and are declared and taxed solely in France. The annual uprating of the UK State Pension paid in France, including the triple-lock mechanism and its French declaration, is examined in detail in our companion analysis of the British State Pension triple lock, uprating and French taxation, which also explains how the pension fits into the French return.

On the French side, the declaration follows the standard foreign-income channel. Anyone domiciled in France who has received income from outside France files form 2047, Cerfa 11226, the return for income received abroad, and attaches it to the overall income return; the official filing page describes it as the declaration to complete where you are domiciled in France and have received income from outside metropolitan France and the overseas departments, to be enclosed with the main return (service-public.fr, declaration of income received abroad). Your British State Pension and private pensions therefore appear twice in your paperwork: once on the 2047 with their country of origin, and once in the totals of the main return, where the 10 per cent allowance and the progressive scale (barème progressif) apply. Keep every P60, every annual pension statement and every HMRC coding notice: if France later queries the figures, or if HMRC withholds tax by mistake, those documents are the evidence on which both the relief claim and any French credit depend, as the case law examined in Part II shows.

B. Your UK government-service pension is taxable only in the United Kingdom

The second category of pension obeys the opposite rule, and it is the one that generates most of the double bills. Article 19 of the 19 June 2008 convention, headed public functions (fonctions publiques), reserves government-service pensions to the paying state. Pensions paid by the United Kingdom, its local authorities or its public-law bodies, directly or from funds they have set up, to an individual for services rendered to that state or body, are taxable only in the United Kingdom. There is one exception, and it is narrow: those pensions are taxable only in France where the recipient is a French resident who holds French nationality without also holding British nationality. A British-only national living in France therefore has a UK government-service pension that is taxable exclusively in the United Kingdom; a dual French-British national in the same position falls under the exception and is taxed in France. The British government’s guidance states the position in the same way, noting that most UK government pensions, giving the civil service as the example, are only taxed in the UK (GOV.UK, tax if you are taxed twice). Teachers’ pensions, NHS pensions, local government pensions, police pensions and armed forces pensions all belong in principle to this Article 19 category, because each is paid for service to the British state or a British public body, while the UK State Pension and private-sector pensions belong to the Article 18 category examined above.

The practical consequence is that two pensions landing in the same French bank account can follow two opposite tax routes. Your teachers’ or NHS pension keeps a British tax life: it remains within UK income tax, it consumes part of your UK Personal Allowance, and it is HMRC, not the French tax office, that taxes it. That is precisely why the October 2026 British debate about the State Pension overtaking the Personal Allowance matters even to Britons in France: if your UK-taxable government pension already absorbs most of your allowance, any other UK-taxable income tips into tax faster, and coding errors multiply. Note that the allowance is not automatic for everyone abroad: British citizens, EEA citizens and people who have worked for the UK government keep the principle of a UK tax-free Personal Allowance, but a person who is not UK-resident must claim it at the end of each tax year in which UK income arises, by sending form R43 to HMRC (GOV.UK, Personal Allowance). Check the allowance position every year rather than assuming the payroll is right.

On the French side, an Article 19 pension must still appear in your French paperwork even though France does not tax it. France eliminates double taxation through a tax credit (crédit d’impôt) mechanism set by Article 24 of the convention. For income of the kind relevant here, the French credit equals the French tax corresponding to that income, granted on condition that the French resident is subject to United Kingdom tax on it. The treaty then defines how that corresponding French tax is computed: where the French tax is calculated with a progressive scale, the credit is the product of the net income concerned and the rate obtained by dividing the French tax actually due on total net taxable income by that total income. In everyday language, this is the effective-rate (taux effectif) method: the foreign pension is counted to set the rate applied to your France-taxable income, and the credit wipes out the French tax mathematically attributable to it. Three refinements from the French high court, examined in Part II, make this mechanism far more taxpayer-friendly than it looks: the credit is not confined to progressively-taxed income, it does not require tax to have been effectively paid in Britain, and it also reaches the French social contributions. A final caveat comes from Article 19 itself: where a pension is paid for services rendered in connection with a business carried on by the state, the treaty sends it back to the ordinary employment and pensions articles instead. Most classic public-sector pensions are unaffected, but if your British public employer operated commercially, take advice on which article truly governs your pension before choosing the declaration boxes.

II. Paying the right amount and challenging a wrong French bill

A. Declaring each pension in the right box and computing the French credit

Correct declaration is a three-step discipline: residence, classification, credit. First, confirm French tax residence under Articles 4 A and 4 B, because everything else flows from it. Second, classify each pension separately. State Pension and private pensions go the Article 18 route: taxable in France, declared on the 2047 and in the main return, 10 per cent allowance applied, UK withholding relieved through the treaty claim so that HMRC stops taxing them. Government-service pensions go the Article 19 route: taxable in the United Kingdom, declared in France for the effective-rate computation with the Article 24 credit neutralising the corresponding French tax. Never merge the two categories into a single declared total without distinguishing them: the French tax office’s computer cannot apply two opposite treaty regimes to one undifferentiated figure, and an undifferentiated figure is the most common origin of the wrong avis d’imposition this article helps you challenge.

Third, compute and verify the credit rather than trusting the assessment. The Conseil d’État, France’s highest administrative court, clarified the Article 24 mechanism for the Franco-British treaty in an advisory opinion (avis) of 12 February 2020, No. 435907, and three of its answers directly protect pensioners. The court held that: “Aucune des stipulations du (i) du a) du paragraphe 3 de l’article 24 de la convention ne permet de restreindre le bénéfice du crédit d’impôt égal au montant de l’impôt français aux seuls revenus relevant d’un barème progressif d’imposition.” The credit therefore covers the French tax on the income even where that tax is not computed on the progressive scale. More importantly for pensioners whose British income bears little or no UK tax, the court held that the condition of being subject to UK tax means the income must be included in the base of a United Kingdom tax listed in the treaty, without being exempted by reason of status or activity, adding expressly that: “En revanche, cette condition n’exige pas que les revenus en cause aient été soumis à une imposition effective.” No effective British taxation is required. And the court drew the final conclusion for people who declare but pay nothing in Britain: “la condition prévue à l’alinéa (i) du a) du paragraphe 3 de l’article 24 de la convention doit être regardée comme satisfaite s’il est établi par le résident de France qu’il a déclaré les revenus en cause au Royaume-Uni, parce que ces revenus étaient compris dans la base de l’un des impôts énumérés au a) du 1 de l’article 2 de la convention, alors même qu’il n’aurait acquitté dans cet Etat aucun impôt à raison de ces revenus.” A British pensioner who declares the income to HMRC but pays no UK tax on it — because allowances cover it — still satisfies the condition for the French credit. Keep the HMRC self-assessment return or the P60 showing the declared amount: under this ruling, that declaration is the key that unlocks the French credit.

The same opinion extends the protection to the French social contributions (contributions sociales, principally the CSG and CRDS levied on replacement income). The court ruled that the treaty’s opening words, allowing France to take income into account for computing French tax even where the treaty allocates the taxing right to Britain, cannot be used to deny the credit against French social contributions on the ground that Britain has no equivalent tax. For a French-resident pensioner affiliated to the French social security system, this means the credit mechanics also shelter the social contributions computed on the British income, within the conditions and limits of the treaty. Verify each year’s assessment line by line: income tax computed with the effective rate, credit equal to the corresponding French tax, 10 per cent allowance correctly applied to the France-taxable pensions, and social contributions with their credit. If any of those four links is missing or miscalculated, the procedure in the next section corrects it.

B. Challenging a reassessment, a denied credit or a double charge

Wrong bills take three familiar forms: France taxes an Article 19 government pension as if it were an Article 18 private pension; France refuses the Article 24 credit, arguing that no UK tax was effectively paid; or both countries tax the same pension because HMRC never granted relief at source. Each has a remedy, but the remedies run on different clocks and each clock must be respected. On the French side, claims seeking correction of assessment or computation errors, or the benefit of a right under legislation or regulations, belong to the contentious courts. Article L. 190 of the Book of Tax Procedures (Livre des procédures fiscales) provides that: “Les réclamations relatives aux impôts, contributions, droits, taxes, redevances, soultes et pénalités de toute nature, établis ou recouvrés par les agents de l’administration, relèvent de la juridiction contentieuse lorsqu’elles tendent à obtenir soit la réparation d’erreurs commises dans l’assiette ou le calcul des impositions, soit le bénéfice d’un droit résultant d’une disposition législative ou réglementaire.” A denied treaty credit or a misclassified pension is exactly that kind of claim: an error in the base or the computation, and the benefit of a right flowing from the treaty, which under Article 55 of the French Constitution prevails over domestic statute.

The admissibility deadline is strict and must be diarised the day the bill arrives. Article R*196-1 of the same Book states that: “Pour être recevables, les réclamations relatives aux impôts autres que les impôts directs locaux et les taxes annexes à ces impôts, doivent être présentées à l’administration au plus tard le 31 décembre de la deuxième année suivant celle” of, depending on the case, the collection of the tax roll or notification of the collection notice, the payment of the disputed tax, or the event giving rise to the claim. For income tax assessed by roll, the ordinary limit is therefore 31 December of the second year after the year of collection: a bill collected in 2025 is normally open to challenge until 31 December 2027. File the réclamation with the tax office that issued the assessment, identify each pension, state its treaty article, attach the HMRC documents proving UK declaration or taxation, compute the credit you claim, and ask expressly for discharge or reduction (décharge ou réduction) of the corresponding charges. If the administration rejects the claim expressly or stays silent, the dispute moves to the administrative court (tribunal administratif), and from there on appeal to the administrative court of appeal (cour administrative d’appel), exactly the path followed in the published treaty-credit litigation.

Two judgments frame the litigation strategy. The Versailles administrative court of appeal, 10 November 2020, No. 18VE01964, heard a French-resident airline captain who invoked the Franco-British treaty’s Article 24 credit for his British-source salary and argued that the 2047 return’s notice bound the administration. The court rejected that last argument in terms worth remembering before you draft: “La notice de l’imprimé n° 2047 n’est pas au nombre des instructions ou circulaires publiées par lesquelles l’administration fiscale fait connaître son interprétation des textes fiscaux. Par conséquent, M. C… n’est pas fondé à s’en prévaloir sur le fondement de l’article L. 80 A du livre des procédures fiscales.” The lesson is not that the notice is useless — it remains the practical guide for filling in the return — but that a court challenge must be anchored in the treaty text and the Conseil d’État’s interpretation of it, not in the notice alone. Plead Article 18 or Article 19 for classification, Article 24 for the credit, and the 12 February 2020 opinion for the three propositions that most often decide cases: credit available beyond progressive-scale income, no effective UK taxation required, and proof by UK declaration sufficient. On the British side in parallel, pursue the DT-Individual relief or refund claim with HMRC so that the United Kingdom stops withholding on pensions the treaty allocates to France; a British assessment corrected at source halves the dispute, because the French file then shows matching figures on both sides of the Channel. Act on both fronts within their respective time limits, keep every notice, return and acknowledgment of receipt, and never let a French deadline expire while waiting for an HMRC reply: the French judge can only grant what was claimed in time.

Conclusion

A British resident of France normally holds pensions that point in opposite tax directions, and the whole exercise consists in never confusing them. State and private pensions for past employment are taxable only in France under Article 18: declare them on the 2047 and the main return, take the 10 per cent allowance, and secure HMRC relief so Britain does not withhold. Government-service pensions are taxable only in the United Kingdom under Article 19, subject only to the French-nationality exception: pay the British tax, claim the Personal Allowance where due, declare the pension in France for the effective-rate computation, and verify the Article 24 credit that neutralises the corresponding French tax and reaches the social contributions. Where the administration misclassifies a pension or denies a credit, the Conseil d’État’s 2020 opinion supplies the three answers that win most cases — no confinement to progressive income, no effective British taxation required, UK declaration sufficient — and the contentious claim must reach the tax office by 31 December of the second year after collection. Kept in that order, each pension is taxed once, in the right country, and any bill that departs from the treaty can be challenged with the treaty’s own words.

Source : Cour de cassation – Base Open Data « Judilibre » & « Légifrance ».

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